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Economy: Senator blames Nigeria’s debt burden on past administrations 

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Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola
Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola
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Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola, made earth shattering revelations on Wednesday during consideration of the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper.

According to the lawmaker, a huge part of Nigeria’s total debt profile roughly estimated at N33trillion naira were incurred by past administrations dating back to the  military era.

He disclosed that majority of the loans being repaid presently by the President Muhammadu Buhari administration were ones accumulated from the times of the military to those of the PDP administration under Ex-Presidents Olusegun Obasanjo, Umaru Musa Yar’Adua and Goodluck Jonathan, between 1999 and 2015.

Senator Adeola disclosed this when asked by the President of the Senate, Ahmad Lawan, to make clarifications on concerns raised by lawmakers, particularly over Nigeria’s debt profile during deliberation on the report of the Joint Committees on Finance; Local and Foreign Debts; Banking, Insurance and Other Financial Institutions; Petroleum Resources (Upstream); Downstream Petroleum Sector and Gas on the 2022-2024 Medium Term Framework.

Responding, Adeola said, “The borrowing you are saying is accumulated borrowing. It is not a borrowing of this administration alone, it is a borrowing that stems from the days of the military to the days when the Democratic dispensation started.

“It is an accumulated loan, it is not a loan that says that it is the current administration of President Buhari that has borrowed.

“It is a loan that has been borrowed by the previous administration – the Obasanjo, the Jonathan, the Yar’Adua of this world.

“[And] since the business of government is a continuum, the President of the day has no choice but to continue to pay back all these loans that have been borrowed by the previous administrations.

“More than three-quarter of these loans you’re seeing were borrowed from the previous administrations, and we are paying back – we are doing what is supposed to be done, the way it is supposed to be done.

“So, when my colleague said that for every sixty-seven naira of any loan that was borrowed, we are using to pay, he should know that more than sixty naira of it are loans borrowed by previous administration. And that is where we are.”

The Senate President, Ahmad Lawan, in his concluding remarks blamed Nigeria’s economic predicament on the failure of past governments to prioritize the provision of critical infrastructure.

According to him, the situation has left the present administration with no other viable option but to seek external borrowing to fund capital expenditures in the national budget.

“I believe that we have learnt so much from the clarification which the Chairman of the Joint Committee gave.

“Let me say this, when you don’t make hay while the sun shines, this is the kind of thing you face.

“When we had plenty of money, we didn’t prioritize the construction of infrastructure in Nigeria. We wasted our resources when we had much.

“Today, we realize we need to construct infrastructure because that is the only way to develop the country. Unfortunately, we don’t have the kind of resources we had before.

“Now, our options are very limited because our revenues are limited. I agree with all our colleagues who said we need to reduce borrowing.

“The Committee on Finance particularly has been doing a good job of ensuring that Ministries, Departments and Agencies (MDAs), particularly Government Owned Enterprises (GOEs), contribute more to the national coffers than they normally do.

“[And] that is why we have more resources today, more revenues or funds in the Independent Revenue Contribution.

“Our Committees need to do a lot of oversight, because when we don’t do the oversight, we also come here annually to this kind of thing of non-remittance of funds.

“Committees are supposed to know how much a Ministry or Agency of Government receives and contributes or remit to the treasury. We actually need to up our game in the area of oversight.”

Baring his thoughts on the raging controversy of Value Added Tax remittance to the Federal Government, the Senate President said, “I   think there’s nothing wrong in continuing with VAT as part of our revenues, because there’s no finality in any judgement yet and, therefore, we shouldn’t confuse our system.

“Until there’s such a very clear cut definite judgement by the Supreme Court, we should go ahead with VAT as part of the resources available to us.

“I want to also challenge the Federal Inland Revenue Service, the Customs and other major revenue collecting or generating agencies, that they need to sit up.

“They need to bring in more revenues because we have given them all the support that is necessary. The Federal Inland Revenue has received a lot of support from this National Assembly, particularly the Senate, and they have no reason not to improve on their collection.”

Speaking on remittance of generated revenues by Agencies of Government, Lawan charged the relevant Senate Committees to identify MDAs with sufficient revenue earnings to fund their operations.

He explained that doing so would create grounds for the exclusion of such MDAs from the national budget, as well as  cut down on government’s annual expenditure.

“Other agencies of government get IGRs and they don’t remit. In fact, they wait for us to give them allocations or appropriations.

“I think it is high time our Committee on Finance or any other related Committees to look at those agencies that we should stop funding through the annual budget, because what they collect is more than enough for them to operate, and in fact they should actually contribute to the national treasury”, the Senate President said.

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Business & Economy

Senate To Probe CBN’s Anchor Borrowers, Ways And Means

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Nigerian Senate
Nigerian Senate
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The Senate on Tuesday, resolved to further investigate N10trn Anchor Borrowers’ Programme by the Central Bank of Nigeria (CBN), as well as accountability in the Ways and Means loans by the Apex Bank.

The Red Chamber said the move was to plug loopholes in future development finance activities of the CBN.

The Senate resolved to set up an ad hoc committee to investigate the details of the Ways and Means, including the various intervention programmes such as the Anchor Borrowers’ Programme, monies given to state governments, manufacturers, aviation, banks, excess funding in the power sector, amongst others which raised the current debt profile of the country.

This was part of resolutions of the Senate after a debate over the report of the National Assembly Joint Committees on Banking, Insurance and other Financial Institutions (BIOFI), Finance, National Planning, Agriculture and Appropriation on the state of the economy.

On the compliance and transparency of economic actions, the Senate equally resolved that the CBN ensured compliance with the provisions of the Act in respect of Ways and Means and accountability through timely submission of its budget, financial statements and report of its activities to the President and National Assembly as stipulated in the Act.

In an extensive debate, Senator Adamu Aliero argued that some state governors, including some retired ones in the Senate, were beneficiaries of N18bn as shock absorbers under the Ways and Means since 2015.

Some lawmakers suggested that a special committee be set up to scrutinize the N30trn intervention disbursements (some of which were grants) and ways to mop them up.

Deputy Senate President Barau Jibrin also explained that the intervention monies were expended outside appropriation without the knowledge of the parliament and noted that lawmakers have a right to interrogate the expenditure.

Senator Victor Umeh, however, deferred, as he enquired to know how the money was spent before approval by the Senate. The issue of whether or not to investigate the matter raised another furore in the Red Chamber.

Senate President Godswill Akpabio thereafter maintained that owing to the current economic situation, it has become expedient to thoroughly examine the Ways and Means funds.

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Oil marketers get approval to sell Dangote fuel

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Aliko Dangote
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The seven major oil marketers in Nigeria have registered with the Dangote Petroleum Refinery for the lifting and distribution of refined petroleum products produced by the $20bn plant.

Dealers under the aegis of the Major Oil Marketers Association of Nigeria confirmed on Sunday that with the registration, they would commence the distribution of fuel produced from the facility once the commercial terms are sorted.

This came as the Independent Petroleum Marketers Association of Nigeria also revealed that they would meet with the management of the Dangote refinery this week to discuss terms of product loading.

Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria stated that PETROAN had been engaging the management of the multi-billion dollar refinery for the supply of products from the facility.

As IPMAN and PETROAN engage the refinery, major marketers who are members of MOMAN have already registered with the plant and are set to start buying products.

The seven major marketers include 11 Plc, Conoil Plc, Ardova Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited, Total Nigeria Plc and NNPC Retail.

Last Friday, the Dangote Petroleum Refinery announced the commencement of production of Automotive Gas Oil, also known as diesel, and JetA1 or aviation fuel.

The President of the Dangote Group, Aliko Dangote, had in a statement issued by the firm, thanked President Bola Tinubu for his support, encouragement, and thoughtful advice towards the actualisation of the project.

He also thanked the Nigerian National Petroleum Company Limited, Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, and Nigerians for their support and belief in the historic project.

“We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals. This is a big day for Nigeria. We are delighted to have reached this significant milestone.

“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects. This is a game changer for our country, and I am very fulfilled with the actualisation of this project,” Dangote stated.

The refinery, located in Lagos, has so far received six million barrels of crude oil at its two SPMs located 25km from the shore. The first crude delivery was done on December 12, 2023, and the 6th cargo was delivered on January 8, 2024.

The refinery can load 2,900 trucks a day at its truck-loading gantries. The products from the refinery will conform to Euro V specifications, according to the firm.

“The refinery design complies with the World Bank, US EPA, European emission norms, and Department of Petroleum Resources emission/effluent norms, employing state-of-the-art technology,” the company stated.

The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria.

The Dangote Petroleum Refinery is an industrial plant that transforms crude oil into various usable petroleum products such as diesel, gasoline, jet fuel, and kerosene.

Dangote Petroleum Refinery with a capacity to refine 650,000 barrels of crude oil per day covers an area of approximately 2,635 hectares in the Lekki Free Trade Zone in Lagos.

When contacted and asked whether major oil marketers would be involved in the lifting of refined products from the Dangote refinery, or whether the facility would distribute the fuel itself, the Executive Secretary/Chief Executive Officer, MOMAN, Clement Isong, replied, “I confirm that we (major marketers) have met with him (Dangote).

According to Isong, all MOMAN members have registered with Dangote Petroleum Refinery to become marketers of its products

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Senate Gives Kyari, NUPRC Boss 24 Hours To Appear For Budget Defense

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Mele Kyari
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The Chairman of the Senate Appropriation Committee, Senator Adeola Olamilekan, on Wednesday, directed the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, to appear before the committee in 24 hours.

Olamilekan, who asked Kyari to appear in company of the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), warned that failure to appear undermines the legislature and sabotages the process.

They are required to present the list of all individual companies operating with OML licenses in Nigeria as well as total production output approved on a daily basis.

The lawmaker expressed concerns that some of the revenues required to drive the 2024 budget was attributed to the NNPCL, which according to him, was owned by the Federal Government and responsible to it, and by extension the three arms of government.

The NNPCL, had earlier shunned for a second time, summons by the Senate to appear before its committee probing over N11trn expenditure on turn around maintenance of refineries in the country between 2010 and 2023.

The absence of Kyari, whose entity is at the centre of the investigation, stalled efforts by the Senate panel to make progress on the matter.

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