Monday 2nd June 2014
Conference resumed sitting at 9:22 presided over by the Chairman - this was a man who lost his wife on Wednesday and he is back on his fit on Monday. Well, men are men really. A strong man he is - when we went to condole with him in his residence, myself and another youth delegate - seeing me he said - this lady is not part of the conference, until my collegue informed him that I was the deputy chair committee on environment - he said "oh the one that presented their committee report and the chairman of the committee came to do it again and received boos?" - he threw his head back and laughed out loud - very simple man I must say.
Well, we amended the votes and proceedings of Monday 26th May, Tuesday 27th and Wednesday 28th May and adopted as amended.
Announcement.
The deputy chair formally announced the death of the wife of the chairman of the conference Hajia Maryamu Idris Kutigi. The deputy chair conveyed the condolence of the conference to the chairman and his family.
The chairman in his response thanked delegates for their overwhelming support to him and the members of his family and told us how both Christians and Muslim trooped to the mosque for the prayer session and the cemetery to pay their last respect to his wife - he particularly thanked the deputy chair and said he will soon convert him to Islam as he was in the mosque and prayed and did all that was done by Muslims - delegates laughed. He appreciated the support of the deputy chair and all conference members.
I remember the chairman telling us while we visited him - see Christian and Muslims are all united, that what they are doing in the conference is just a hoax.
After all said, the chairman again announced the death of the son of a delegate Senator Rashidi Adewolu Ladoja in a car accident - the deputy chair disclosed that the leadership of conference, on behalf of delegates had sent the bereaved delegate a condolence message.
Also the deputy chair announced that the secretariat on behalf of the conference had sent a message of felicitation and sympathy to the Emir of Askira HRH Abdullahi Ibn Muhammad (Askira 3) who escaped assassination by gun men.
The deputy chair introduced a delegate Mallam Ado Yakubu Wanka to replace and elder-statesman - Alhaji Adamu from Bauchi.
The chairman informed delegate that management is in receipt of a letter which was endorsed to it by inspector general of police on a petition by aides and drivers of delegates. The aides and drivers indicated in the petition, their intention to embark on a protest over their welfare - the deputy chair appealed to the delegates to restrain their aides and drivers from engaging in acts that may disrupt the conference - well some who made personal investigation revealed that the drivers and aides in question are not well paid by their bosses some of them sleep in the cars or in hotel parking lot and are paid stipends. It's baffling though - who do they expect will take care of the welfare of their aides while they are being paid? Some of them have over 15 aides, minus driver that is - well I have no aide neither do I have a driver.
Now back to the main business of the day.
The committee on Public finance and revenue generation presented their report and this is how it went:
The main recommendation on the report;
The committee recommended the complete removal of fuel subsidy, stating that subsidy on petroleum products is an avoidable major financial burden the nation has been made to bear.
It said between 2006 and 2007, subsidy accounted for 30% of government expenditure which translated to 118% of capital budget and 4.18% of the Gross Domestic Product.
It was also revealed that subsidy payment of N2.527 trillion in 2012 and 2013 averaged N1.263 trillion per annum and described it as “a burden too heavy for the nation and its populace.” They further stated that resources which should have been used to undertake more developmental projects were being spent on subsidy.
They also stated that the poor and the rural dwellers to whom the subsidy scheme was initially targeted were not reaping the benefits; and that removal of subsidy would encourage investments in refineries and the downstream sector generally.
So many argued against the complete removal of subsidy; since constant power supply in the country was still a mirage; government should first fix all the sick refineries for local production of petroleum products before removing the subsidy. Those against the complete removal also stated that criminal activities would increase nationwide if the removal was carried out since majority of artisans who rely on small power generating sets to do their business would be out of work.
Those in support of the complete removal of subsidy argued that it causes wastage and high level corruption among both the fuel importers and certain government officials. They also argued that continuous subsidization of fuel would amount to deliberate effort to enrich a few Nigerians at the expense of others; and what is advisable would be to ensure judicious use of funds accruing from the subsidy removal.
Other recommendations made by the committee include; enhancing accountability, transparency and avoid mistrust between the three tiers of government, they said it has become absolutely necessary to have Accountant Generals of the Federation and that of the Federal Government - the Accountant General of the Federation would manage the accounts of the federation while Accountant General of the Federal Government would handle the finances of the Federal Government.
The committee also noted that in the 1970s, budgetary allocations, up to 70%, were always in favor of capital expenditure; a situation it said enhanced economic development; but that the situation has since changed further stating that In the last 10 years, it said approximately 73% of the annual budgets have been devoted to recurrent expenditure leaving a mere 27% for capital.
“The present budget mix is unacceptable as no economy can grow with such a paltry allocation for capital and still be expected to provide vital infrastructure and social amenities for the populace.
They also objected the current procedure - where budgets are submitted to the National Assembly and thereafter, the crude oil benchmark is subjected to upward reviews, thereby increasing the size of the budget.
The Committee therefore recommended that the country maintains a budget mix of at least 60% capital expenditure and 40% recurrent expenditure to leave substantial fund to address infrastructural gap, provide jobs and promote general economic growth and development. Urging that the time frame for the presentation of the annual budget to the National Assembly should be on or before September 30th preceding the budget year; while the passage and presidential assent must be completed on or before December 31 and also Fiscal Responsibility Act of 2007 which deals on budget issues be enshrined in the 1999 Constitution and all the controls and sanctions therein adhered to.
The Committee provided a comprehensive list of essential solid minerals found in states of the federation explaining that these can be a veritable source for diversification of the country’s non-oil revenue base and that when fully tapped, the revenue profile would change from oil dominance – some who did not see the name of their state in the list rose to make a case.
The committee also recommended that a minimum of 50% of all funds in excess crude account be transferred to the SWF while the balance should be used to augment where necessary, certain shortfalls in the FAAC in the short term and the SWF be enshrined in the 1999 Constitution.
On oil and gas pipeline leakages and theft, the Committee urged that commensurate security be deployed to these areas to deter, detect, apprehend and prosecute perpetrators of the crime. Besides deployment of security personnel, Committee members said there was need for acquisition and deployment of appropriate technology to check fuel and pipeline vandalism. It demanded government to provide opportunities for young people to be involved in the oil and gas activities as this would engender gainful employment for youths, while calling for the passage of the Petroleum Industry Bill, it emphasized the need for intelligence gathering and processing in tracking movement of ocean bound vessels coming in and going out of Nigeria – Security ke? when some of them have the backing of the……….. erm never mind.
The Committee suggested that government should consider involvement of private companies in the management and replacement of oil pipelines, some of which it said are over 50 years old.
The committee noted that, as things stand now, Nigeria’s external debt ratio is below the international benchmark of 40%; and that this has created room for further external borrowings, It said back home, instead of the stated position helping in the growth of the economy, domestic debt profile, especially debt owed local contractors, unpaid salaries of public servants, pensions and gratuities have contributed to hamper the growth.
It recommended that while there is room for borrowing, such external borrowing must be tied to designated projects which must be efficiently and prudently implemented to reduce pressure on lendable funds – rich in dept, giant of Africa.
At some minutes past 6pm we adjourned to resume the following day and continue deliberations on the committee of public finance and revenu
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