Osinbajo: Nigeria’s debt profile now $60bnPENGASSAN calls for declaration of emergency in oil sector
The direction and programmes of the incoming administration of Major General Muhammadu Buhari (rtd) appears to be emerging with the guide being offered in the form of start-up reform marshal plan by a former British Prime Minister, Mr Tony Blair, who urged him to carry out a complete overhaul of the Nigerian National Petroleum Corporation (NNPC) and solve the problematic petroleum subsidy regime within the first 100 days of assuming office. The recommendation is in synch with the call by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) for the incoming Buhari administration to declare a state of emergency in the oil sector given its myriad of problems. Blair’s policy pep-talk came just as the Vice-President-elect, Prof. Yemi Osinbajo, gave a frightening picture of the country’s economic situation, saying that Nigeria’s local and international debt burden has hit $60 billion, while the debt servicing bill for 2015 is N953.6 billion (about 21%) of our budget.
The ex-British prime minister, who was represented by Peter Benjamin Mandelson, a former Secretary of State for Trade and Industry, at a two-day All Progressives Congress (APC) Policy Dialogue holding in Abuja, yesterday advised that the government should as a matter of priority undertake the shake-up in the management of NNPC within the first 100 days of assumption of office. Blair said the new government should try to utilise the enormous goodwill it presently enjoys to take far-reaching economic decisions, including taking an intelligible stand on the controversial fuel subsidy policy. “You have more goodwill to do very difficult things at the beginning of your administration than later. You can crack the NNPC with the first 100 days,” he said. According to Blair, Nigeria has huge natural endowment of energy resources but could not effectively utilise such rich resources to economic advantage because of misplaced priorities.
“These issues are like this, for a country that has extraordinary resources of oil and have this amazing privilege of source of energy, yet power generation was not as good as it should. People having to wait for hours queuing to get fuel and end up buying it elsewhere. I think the resources voted for this subsidy can be better used for other things. “Where is it running away to? I think we need to recapture this oil resource and the revenues put to good use so that it can be invested for the long term good of the country, in infrastructure, human capital development, education system and skill acquisition that people need to work with in the future. “This is where the money should be going to. That is why before reorganisation and also the long reach of the law, there is the need to begin here pretty soon in order to make sure the system as whole works better for Nigeria. That is my view,” he said.
Exhibiting deep knowledge of Nigerian internal political dynamics, the Briton further advised Buhari not to turn his back on the people of the South-east and South-south based on the perception that he did not get the support of the voters from the zones. “You need to show the people who did not vote for you that you care for them and will work to solve their problems as much you will do for those that supported you. This is what is called ‘Big stake politics’,” he said. He also advised the government to tackle frontally the problem of unemployment immediately after taking over the administration of the country if it must successfully reduce youth restiveness and sectarian crisis.
He said that everything must be done to avoid allowing a return to the usual bad ways of doing things. While declaring the policy retreat open, Prof. Osinbajo, who also stood in for Buhari, said the country’s economy is currently in its worst moment in history. Apart from the figures of extreme poverty in the country, which he said had now affected 110 million Nigerians, Osinbajo said the country’s local and international debt stands at $60 billion, while the nation’s debt servicing bill for 2015 is put at N953.6 billion, 21 per cent of Nigeria’s budget. “The figures of extreme poverty in our society — 110 million by current estimates — makes it clear that our biggest national problem is the extreme poverty of the majority. Thus, no analysis is required to conclude that dealing with poverty and its implications is a priority. “We are concerned that our economy is currently in perhaps its worst moment in history.
Local and international debt stands at US$60 billion. Our debt servicing bill for 2015 is N953.6 billion, 21% of our budget. On account of severely dwindled resources, over two-thirds of the states in Nigeria owe salaries. Federal institutions are not in much better shape. Today, the nation borrows to fund recurrent expenditure,” he said. Osinbajo drew the attention of the gathering to some of the key issues raised by the party during the campaign which included addressing the challenges of economy, insecurity, corruption and job creation. Osinbajo lamented the highly unequal society in which the country had found itself, adding that “the largest chunk of the benefits of our national wealth accrues to a small percentage of our population”.
He said the APC manifesto has offered a vision of shared prosperity and socio-economic inclusion for all Nigerians, that leaves no one behind in the pursuit of a prosperous and fulfilling life. According to the vice-presidentelect, the goal of the policy dialogue is to “interrogate the various positions and propositions before a wider audience and to launch a robust public conversation on policy directions and priorities that will help inform our administration’s approach in the next four years”. “This forum exemplifies the sort of consultative and consensual approach to policymaking that our party and the new administration intend to model in office,” he said.
In his remarks, the Director of Policy, Research and Strategy in the Directorate of the APC presidential campaign, Dr. Kayode Fayemi, said the phase of policy conception is over and that the party should now be thinking of “execution, governance and of providing tangible developmental deliverables”. The policy dialogue continues today with presentations by panelists drawn from various sectors of the economy and social backgrounds.
In the same vein, citing a plethora of challenges bedevilling the Nigerian oil and gas industry, PENGASSAN has urged the incoming administration of Buhari to declare a state of emergency in the sector to address its many problems. The oil workers argued that all sub-sectors of the oil and gas industry are going through one problem or the other which are not only dwindling the fortune of the sector, but the entire Nigerian economy as the sector currently accounts for more than 80 per cent of Nigeria’s foreign exchange earnings In a statement by PENGASSAN’s President, Mr. Francis Johnson, the senior oil workers said there are many issues in the oil industry requiring urgent attention from the in-coming government.
They urged Buhari to reposition the industry for efficient and effective delivery of its benefits to Nigerians. Johnson also noted in the statement that there is need for the in-coming government to call an all-inclusive stakeholders’ forum of those involved in operations in the sector to critically examine and proffer workable and enduring solutions to all the problems in the larger interest of the Nigerian nation.
Johnson said: “All the subsectors of the oil and gas industry have one challenge or the other and all these challenges are affecting the deliveries of the benefits of our God-given hydrocarbon resources to the country and the entire people of Nigeria. “These challenges are as a result of past neglects, wrong policies and policy summersault in some areas of the subsectors.
All these are inflicting pains on Nigerians who ought to be enjoying the benefits of the natural resources that God bequeathed to the country.”