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Against the backdrop of the recent debate on the removal of fuel subsidies[1], and the calculated misinformation being peddled by opponents of this policy, it is pertinent to highlight, in more tangible terms, some of the significant allocations that have been made to essential sectors of the economy, both in the 2012 budget as well as the recently-launched Subsidy Reinvestment and Empowerment Programme (SURE-P). This programme is a 3—4 year programme designed to mitigate the immediate impact of the removal of fuel subsidy and accelerate economic growth through investments in critically-needed infrastructure.



It is noteworthy that, while the 2012 budget allocated the best possible amounts to these critical projects, additional resources are allocated to the same projects in the SURE programme to ensure that they are completed at faster rates than envisioned in the 2012 budget. Some of the projects and allocations are as follow:



Works

· N11bn is allocated to the Abuja-Lokoja road in the 2012 Budget, with an additional N14bn from the SURE-P.

· N6bn is allocated to Benin-Ore-Shagamu, with an additional N16.5bn to be financed through SURE-P.

· N3bn is allocated to Port-Harcourt–Onitsha road, with an additional N5bn from the SURE-P.

· Similarly, N18.5bn is allocated to Kano-Maiduguri road, with an additional N1.5bn from SURE-P.

· Provision is made in the 2012 budget for construction of the Second Niger Bridge (N2bn) and Oweto Bridge (N3.5bn). An additional N5.5bn and N4bn would be spent on both bridges respectively from the SURE-P.

· Provision of N23.5bn is made for maintenance of roads and bridges across the country through Federal Road Maintenance Agency (FERMA).



Power

· The total amount allocated to the power sector (including Bulk Trader, Nelmco, and Multi-Year Tariff Order (MYTO) and PHCN privatization) is N248bn.

· A sum of N392 million allocated to Nigeria Electricity Liability Management Company and N650 million for Bulk Trader.

· In the 2012 Budget Proposal, a sum of N3.7bn is allocated to the Kaduna Dual Fired Power Plant.

· Similarly, N2bn is allocated for the completion of the small and medium hydro-electric power plants Oyan Dam Hydro Power (Ogun state).

· A sum of N2.2bn is allocated for feasibility studies regarding the establishment of coal fired power plants.

· Additionally, N155bn will be spent on Power projects (Mambilla power plant, Coal Power Plant and Small Hydro power plants) through the SURE-P over the period 2012-2015.



Agriculture & Rural Development

· The total allocation to the sector is N78.98bn

· N4bn is allocated to research and mechanisation

· Provision of N1.22bn is made for the construction of access roads to each of the 6 Staple Crop Processing Zones.

· Value Chain: N720 million is allocated to the development of value chains in cocoa, rice, maize, livestock, cotton and others sectors.

· N1bn is allocated to the Price stabilisation scheme.

· N610 million to facilitate for the access to credit, fertilizers and seeds.

· An additional sum of US$500m is expected from Development Finance Institute to support the sector.



Transport

· Rail lines: The 2012 budget allocates N3.95bn, N3.15bn and N3.35bn to the construction and completion of Abuja-Kaduna, Lagos-Ibadan and Ajaokuta-Warri rail lines respectively. In addition, the SURE-P allocates N11.6bn to the Abuja-Kaduna line and N9.3bn to the Lagos-Ibadan line.

· Provision of N800mn is made for the procurement of wagons, coaches and locomotives.

· Dredging project: N1.2bn is allocated to the dredging of Lower River Niger (Warri-Baro).



Education

· The total allocation to the sector is N400bn

· N11.6bn is allocated for existing universities.

· N7.7bn is allocated for the restructuring to Unity Schools.

· National Teachers Institute: The 2012 budget allocates N3.5bn to the retraining of teachers for basic education and training in innovative teaching.

· Moreover, an additional N24.6bn will be spent on vocational training centres from the SURE-P.



Health

· N4.6bn is allocated to the Polio eradication programme

· N3.5bn is allocated to the procurement of HIV/AIDS Drugs

· The sum of N174 million is allocated to Integrated maternal, newborn and child health strategy, including capacity building, and promoting school health initiatives.

· N8.42bn is allocated to Federal University Teaching Hospitals.

· N6bn and N3.6bn are allocated to the procurement of vaccines and midwifery service scheme respectively.

· An additional N73.8bn will be spent on Maternal and Child heath from SURE-P.



Aviation

· Various Airports: N22.2bn is allocated for the modernization of airport terminals and upgrading of facilities in the six geopolitical zones of the country.



Federal Capital Territory Administration

· N3.1bn is allocated to the construction of a 20,000m3/hr lower Usuma dam Water Treatment Plants.

· N2.5bn is allocated to the construction of Cultural and Millennium Tower.

· N1.25bn is allocated to the Development of Idu Industrial Area (1b Engineering Infrastructure).

· Various road projects including the completion of roads B6, B12 and circle road (N4bn), rehabilitation and expansion of airport Expressway (N7.53bn).



Niger Delta

· East-West Road (Section I—V): The 2012 budget allocated N22.2bn to this road. In order to accelerate its completion, an additional N21.7bn is allocated in 2012 from the SURE programme.



Water Resources

· N1.2bn is allocated to the construction of Central Ogbia Regional Water Project.

· A total of N4bn are allocated to the construction of dams.

· Other provision for water facilities (i.e. regional water supply scheme) of N8bn.

· Rehabilitation of river Basin authorities (12 nos) of N13.91bn.

·Moreover, over the period 2012-2015 an additional N205.5bn will be invested in rural water scheme, water supply scheme, irrigation scheme and other water related projects from SURE-P.


These projects will not only significantly improve the country’s infrastructure, but will also create millions of jobs for Nigerians. This struggle is not between the government and Nigerians, because government is squarely on the side of the people. The fight is between the government and Nigerians on one side, and persons who are bent on continuing their age-long “milking” of the system for their personal benefits on the other side.



Please let us support government’s efforts at defeating these persons, and creating a better country for all Nigerians.

Below is a secret cable of the United States Government on the fraud in the oil sector in Nigeria as published by Wikileaks.

C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000767

SIPDIS

NOFORN

E.O. 12958: DECL: 04/07/2014

TAGS: EPET EINV EFIN PGOV NI

SUBJECT: SCANDAL BREWING OVER NIGERIAN FUEL IMPORTS

Classified By: J. GREGOIRE FOR REASONS 1.5 (B), (D), AND (E).

¶1. (C) SUMMARY. A scandal is brewing in Nigeria over prices paid by the government for imported fuel. International fuel traders have been falsifying the dates of bills of lading to reflect particularly high market prices, overcharging the Nigerian National Petroleum Corporation (NNPC) by $300 million or more. END SUMMARY.

¶2. (C N/F) On April 2, Chris Finlayson, Chairman and Managing Director of Shell Petroleum Development Corporation of Nigeria (SPDC), told Consul General and Econoff that a scandal is brewing within the NNPC over payments made to international fuel marketers. Finlayson said some marketers have been changing the dates when fuel shipments bound for Nigeria were loaded in order to take advantage of particularly high market prices. He said the total overpayment by NNPC may be as high as $330 million. Finlayson noted that Shell is not one of the marketers in question, but is becoming a leading fuel supplier for NNPC.

¶3. (C N/F) On April 6, Femi Otedola, President and CEO of Zenon Petroleum and Gas, the largest supplier of diesel fuel in Nigeria, essentially corroborated Finlayson's report. Otedola said over $300 million has been overpaid by NNPC for fuel imports, and that many leading international traders are involved. According to Otedola, NNPC contracts to pay its suppliers the market price on the day a ship is loaded with fuel. He said NNPC recently discovered, however, that bills of lading were altered to reflect loading on days of high market prices. Discrepancies were found when comparing dates on the bills of lading with dates of landing in Lagos.

¶4. (C N/F) Pointing to examples, Otedola said that while a tanker loading fuel at a refinery in Bahrain usually takes four weeks to arrive in Lagos, comparisons between the bills of lading and dates of arrival of some shipments reflected only a four-day difference, and in other cases, if taken at face value, indicated the journey took nine months. Otedola said 73 shipments from refineries in the Persian Gulf, England, and Venezuela listed delivery times of only one day. NNPC is attempting to get compensation for the over-charge. Otedola went on that most of the fuel traders supplying Nigeria are implicated in over-charging NNPC, and showed a list of 17 companies that supplied fuel in the first quarter of 2004, several of which, he said, are significant players in international markets, such as Trafigura and Vitol. Otedola added that three companies clearly not involved in the scandal are British Petroleum, ChevronTexaco and Shell.

¶5. (C N/F) Otedola recommended that NNPC stop contracting with international fuel traders and negotiate purchases directly from refineries worldwide. According to him, such a move would have two positive effects. Otedola calculates that NNPC would save some four billion dollars a year in expenditures on imported fuel. (Note: Prior to deregulation in October 2003, NNPC, then the sole importer of fuel, lost two billion dollars per year because it sold stock to retailers below purchase price. After October 2003, NNPC initially stopped subsidizing fuel sales, letting marketers import fuel to be sold at market prices. However, sources agree that NNPC is back in the business of subsidizing gasoline sales while it maintains a facade of deregulation by encouraging private marketers to import fuel that NNPC purchases at market price. NNPC then sells the fuel to marketers and retailers at a reduced price to ensure that those companies maintain a profit margin while holding consumer prices to informal caps set by the Department of Petroleum Resources. End Note.)

¶6. (C N/F) Otedola added that by cutting out the international traders, NNPC would also enhance the environment in which Nigeria's refineries could be restored and operated. Otedola said he believes international fuel trade "mafias" are behind the failure to bring Nigeria's refineries back on-line and to capacity. Otedola is convinced these traders arrange for the vandalization of crude oil feeder pipelines, which keep the refineries at Port Harcourt, Warri and Kaduna closed or under-capacity. He said the international traders generally receive at least one million dollars per shipload of fuel to Nigeria and have grown accustomed to the easy money Nigeria offers as long its refineries remain down.

¶7. (C N/F) As an example, Otedola described an arrangement the National Electric Power Authority (NEPA) had with Sahara Energy for the provision of diesel to an emergency power generation plant in Abuja. He said that while a pipeline was under construction to deliver fuel to the main power plant,

NEPA paid some five billion dollars to Sahara over four years for diesel to the back-up plant. It was later discovered that NEPA had received only about one billion dollars worth of fuel, according to Otedola. Otedola said that he, too, was contracted to deliver diesel fuel to the plant on occasion; however, he petitioned the president to investigate the matter after becoming suspicious of NEPA's ongoing contract with Sahara and the fact that the pipeline for the power plant was never finished. He said his intervention led to an investigation that ultimately resulted in the cancellation of NEPA's contract with Sahara.

¶8. (C N/F) COMMENT: The allegation that international traders bilked NNPC of hundreds of millions of dollars is yet another example of the poor management of Nigeria's energy sector, and highlights the complex links between crude sales, fuel importation, refinery maintenance, and energy production here. Otedola is probably right in suggesting that long-standing sweetheart deals between the NNPC and a variety of fuel traders is keeping the system inefficient. That may also explain why the GON just can't seem to get its refineries running even after spending a billion dollars or more on maintenance contracts over the last four years. Otedola said he initially bid to purchase the Port Harcourt refinery offered for privatization, but he recently told President Obasanjo he will not invest in the refinery so long as NNPC purchases fuel from traders instead of negotiating directly with refineries in other countries and leasing ships itself to deliver fuel to Nigeria. It is not clear if Otedola's assumption that the international traders' stake in Nigeria's current fuel market is the main driver behind the country's refinery woes. But it is clear that the fundamentals of infrastructure security, interim supply stability, and transactional transparency must still be addressed if the GON is to be taken seriously about its efforts to deregulate and largely privatize Nigeria's downstream petroleum sector.

DEMOCRACY guarantees freedom of expression to the individual. On that score it is impossible, when the going is tough for the nation, to ask any blabber to shut up. We may, therefore, not request that Chief Femi Fani-Kayode, an erstwhile Minister of the Federal Republic of Nigeria, should stop ventilating his ill-digested and inchoate viewpoint on the currently challenging issue of the removal of oil subsidy.

What we must do is point out the fallacy and lack of insight of his standpoint, in order that well-meaning Nigerians would avoid being contaminated by them.

Femi Fani-Kayode published an article entitled Subsidy: Okonjo-Iweala is the problem in the Vanguard of Friday January 6, 2012. This was his opening flourish: “In my view, Ngozie Okonjo-Iweala is the problem. She is the architect of this policy. She serves the interest of the IMF and the World Bank more than she does the interest of the Nigerian people.”

It may be a small matter that Fani-Kayode does not even know how to spell the Honourable Minister’s first name which he misspelt twice in his piece. But it is tragic that he did not bother to substantiate the accusation he levelled against the Finance Minister. It is even more calamitous that the ex-minister claimed to have located a national problem without proffering any way of solving it. This is philistinism.

For anybody who is interested in helping Nigeria to come out of its present economic difficulties, the fundamental thing to do is look at the figures. The figures appeared on the front page of the issue of the Vanguard in which Fani-Kayode went sounding off.

They showed that the sum of N4.749 trillion was earmarked for the 2012 national budget. Of this sum, N1.3 trillion was set aside for the defraying the cost of oil subsidy. This clearly shows that the country is hemorrhaging, a situation that is unsustainable.

Works got N180.8 billion. Health got N282.77 billion. Education was allocated N400.15 billion. President Goodluck Jonathan’s thinking, which has amply been ventilated by his Finance Minister, is that the removal of oil subsidy will release huge funds that would be channeled to other areas of national development.

Government did not deny that oil subsidy removal will occasion considerable difficulties for the masses, which is why palliative measures were put in place. The understanding is that, if these measures are meticulously implemented, fuel prices will crumble as happened in the cell phone industry while the oil industry itself will settle into itself rather than remaining an instrument in the hands of a vicious cartel.

Mr. Fani-Kayode did not deny the truth in all of the above. He did not say what Dr. Okonjo-Iweala should have done differently. He did not put forward any original ideas on salvaging the nation’s economy. He did not cite any foreign examples of countries that exited such economic logjams through different channels.

He merely alleged that the Finance Minister was taking dictation from the Bretton Woods Institutions because that is the kind of flowery and inflammatory nonsense that appeals to screamers on the barricades. What, indeed, is wrong in slashing the intolerably high expenditure on the oil subsidy front in other to ensure that the Works Ministry gets ahead with the construction of roads and bridges?

It is well known, even in the ranks of the uneducated, that abuses do not win arguments. Invectives only take the place of reasoned argument when the person throwing them about has nothing tangible to say. That is why Fani-Kayode went out of his way to fire broadsides in the direction of the Honourable Minister of Finance.

The man is happy to be addressed as “Chief” and, in fact, insists on the recognition of his chieftaincy. But he went calling the Minister by her first name as if the world will come to an end if he called her “Mrs,” as a happily-married woman, or doctor in recognition of her MIT doctoral pedigree.

All that could be put aside but what does one make of this sentence from Fani-Kayode? “If the World Bank tells her to jump she will ask “how high”? This is the woman that is virtually our Prime Minister today. No wonder we are in trouble. People like this have very little feeling for the masses and they cannot empathise their pain.” Would this man rather that Okonjo-Iweala is “Deputy Prime Minister”?

Or “Assistant Prime Minister”? What has the talk of prime minister-ship got to do with our presidential system of government? How does he reconcile writing that Okonjo-Iweala “is civilised, well-bred, exceptionally intelligent, warm and affable” in an article in which he described the woman as unfeeling? This shows a confused man pretending to have in his hands all the answers for the Nigeria’s problems.

Fani-Kayode’s incoherent article does not surprise in terms of its vituperations. Was he not the fellow who, in 2004, said the following of the venerable Chinua Achebe: “No matter how distinguished and resourceful a person you are and no matter how brilliant and gifted an individual you are, if you feel that your country does not deserve to honour you, then we believe that you certainly do not deserve your country.”

He said this of Achebe for rejecting a ritually-hollow national honour thrown in his direction by Obasanjo. But he failed to address the reason for which Achebe acted the way he did.

Fani-Kayode talked in rosy terms of his days in power. Unfortunately for him, the EFCC is uninterested in the fragrance he alone perceived. This explains why the anti-corruption body dragged him to the courts for money laundering and sundry charges.

Indeed, Fani-Kayode’s fulminations lend credence to those insisting that the EFCC must expedite action in the prosecution of all those they believe are guilty of causing the country financial adversity. After all, is it not true that someone in the slammer for financial crimes against his country can hardly be in the media sowing confusion when sensible non-convicts are busy trying hard to mediate the nation’s multifarious problems?

*Mr. Nmutaka, a commentator on national issues, wrote from Lagos

Source: http://www.vanguardngr.com/2012/01/between-reason-and-foolery/

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Nigeria...the land flowing with milk and honey.

Nigeria...the land flowing with milk and honey.

Nigeria...the land flowing with milk and honey.

Do you know that:
• Petrol Subsidy is a major channel for corruption?
• The inefficiencies of the subsidy regime have created an enabling environment for corruption to thrive. A small group of wealthy persons have benefited significantly from this system with little benefits accruing to the common man.

• Petrol Subsidy will eventually bankrupt Nigeria?
• 30 percent of total federal government expenditure or about 4.2% of GDP is spent on payments to fuel marketers as petrol subsidies, yet the government has to borrow a fraction of this figure to finance the budget deficit. This level is unsustainable and this unlimited liability exposes the government to volatility in oil prices.

• Petrol subsidy is denying Nigerians jobs?
• Since 2000, about 20 refinery licenses have been issued to private investors which should have led to hundreds of thousands of jobs being created but not a single refinery has been built because the subsidy will not allow investors to recover costs.

Removing the monies paid to petroleum marketers as subsidy is the only way out. But where will the savings go?

The Federal government has established a Subsidy Reinvestment and Empowerment Programme (SURE – P) that Nigerians can use to hold government accountable. The discontinuation of the current fuel subsidy will save additional resources for investing in programmes targeted at mitigating poverty and spurring economic growth.

• Healthcare—many of our mothers, sisters, and daughters are dying in childbirth. At 545 deaths per 100,000 live births, Nigeria has one of the highest maternal mortality ratios in the world. In addition, our children are dying from preventable causes. 1 in 6 children will die before age 5. The SURE – Programme will provide additional N 73.8 Billion to save the lives of 12 million pregnant women and children over the course of 4 years.

• Youth Employment— over half of Nigerian youth are unemployed, a socially unacceptable phenomenon. The SURE Programme has earmarked N81.1 billion to provide 370,000 jobs per year across the country for the unemployed youth through labour-intensive public works scheme, vocational training and youth employment programmes.

• Urban Mass Transit Scheme – given that Nigerian households spend between 30 to 40 percent of income on transportation, the government’s SURE programme has allocated N20.5 billion to increase mass transit availability in order to alleviate the transportation challenges of ordinary Nigerians.

• Roads—our roads have become death traps! Nigeria is ranked 191 out of 192 countries in the world with un-safe roads, with 162 deaths per 100,000 population, resulting from road traffic accidents. An additional N283 billion will be invested into the road sector, under the SURE programme, to complete over 1,326 km of high-quality roads across the country.

• Power—our epileptic power supply is crippling the growth of this economy. The SURE programme will invest N195 billion in the construction of large, small and medium hydropower plants that will generate a cumulative capacity of 2740 megawatts of electricity, while also providing counterpart funding for the development of coal power projects with a potential to generate 1000 megawatts.

• Food Supply—how can a country so blessed with arable land and hardworking people continue to spend about US$10billion on food imports? The removal of subsidy would free resources for a drastic increase in investment in Agriculture to ensure food security for our people.

• Other critical infrastructure investments –funds from the SURE-Programme will also be invested in the following sectors: Petroleum, ICT, Niger Delta, Agriculture, and Water. Specific projects include:

- Construct 3,877km of railway lines;
- Revitalize irrigation projects on 28,850 hectares of land;
- Build 3 new refineries with a combined output of 30 million litres of petrol in Bayelsa, Kogi, and Lagos States.
- Completion of the East West road across major towns in the Niger Delta.

This struggle is not between the government and the masses because government is squarely on the side of the masses. The fight is between the government and masses on one side, and persons who are bent on continuing their age-long “milking” of the system for their personal benefits, on the other side. Let us support government’s efforts at defeating these persons, and creating a better country for all Nigerians.

Ambassador Campbell, the author of Nigeria on the Brink, and close business associate-cum-confidant of Alhaji Atiku Abubakar, former Vice President of Nigeria, has published an article on his blog where he proceeds to salivate over unfolding scenarios in the country.

Many will recall that Ambassador John Campbell was denied a visa to Nigeria on his way to the graduation ceremony of ABTI America University, Alhaji Atiku Abubakar's University.

In his current article, the former Ambassador from United States to Nigeria from 2004 to 2007, speculates that Nigerians will riot and that President Jonathan may resort to firing Okonjo-Iweala and he may restore fuel subsidy. This stupid and illiterate assertion is based on the already discredited opinion that the Coordinating Minister of the Economy and Minister of Finance introduced Fuel Subsidy.

Unfortunately, while Dr Ngozi Okonjo-Iweala was still serving as Managing Director of the World Bank, the fuel subsidy debate was raging in Nigeria. So, on what premise would he make such an uneducated and asinine suggestion? In fact, the debate was raging so greatly that she was asked about her opinion on Fuel Subsidies during her confirmation hearing, which was televised nationally.

This will not be the first time Ambassador Campbell has attempted to predict doom for Nigeria. Faced with the elections last year where Nigerians voted peacefully, Ambassador Campbell predicted absolute chaos and doom during the election. He said there will be absolute chaos in Nigeria and the elections will be a failure. Unfortunately for Ambassador John Campbell, his predictions failed. He is also known to bandy the fact that Nigeria is a weak state and that it will break up by 2015.

Campbell has never predicted anything positive for Nigeria. The question one should ask is whose interest is Ambassador Campbell serving? Who is this white man who pretends to love Nigeria more than Nigerians? At a time when everyone is predicting that Africa's turn has arrived, this dunderhead is predicting the opposite. This is a man who sits in Washington, parachutes into Africa every once in a while to see his business colleagues and then retreats to write nonsense about the continent. Practically all the write-ups from John Campbell are based on gossip. His discredited Wikileaks cables were filled with beer parlour gossip that showed an absolute lack of rigor and discretion. It is no wonder that the US State Department was embarrassed with the leak of the cables authored by John Campbell because his cables lacked intellectual depth and contained basic factual inaccuracies that a little investigation would have proved.

In the opinion of another writer, "It is White men like John Campbell who come to Africa to seek leaders who are ready to sacrifice their countries’ interests for personal gain and comfort.

Nigeria...the land flowing with milk and honey.

Nigeria...the land flowing with milk and honey.

Nigeria...the land flowing with milk and honey.

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Dr. Iweala has spoken well

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey


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Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey

Nigeria is a land flowing with milk and honey