Thursday, March 31, 2011

Nigeria’ll stop oil imports in 2014, says Aganga


IN three years, Nigeria will stop importing petroleum products, Finance Minister Olusegun Aganga said yesterday.

Also to stop is the importation of rice and some other commodities. The measures are to grow the economy, according to the Minister, who spoke in Lagos during an interactive session with The Organised Private Sector, hosted by the Debt Management Office.

He disclosed that the government had saved N12 billion from Ministries, Departments and Agencies (MDAs), as it renews interest in fiscal discipline in public finances.

The government is discussing with three investors, who are billed to set up refineries in the country.

Nigeria, which is the world’s seventh largest producer of crude oil, and in spite of the fact that she has four oil refineries, imports about 70 per cent of its refined petroleum products. The refineries, which have the capacity to process 445,000 barrels of crude a day, are running at about 30 percent of installed capacity. All four refineries are undergoing routine maintenance.

About N700billion is spent on petroleum subsidy annually.

Aganga said Nigeria would save a lot of money, if it produces petroleum products locally.

“We want make sure that in the next three years, all these areas that we are wasting our foreign reserves on will be stopped. Rice is another area that government is working to stop importation. Government is committed to providing the right environment for these industries to thrive,” he said.

In his view, the government will save a lot by using gas to produce fertiliser and cultivating over 58 million hectares to produce enough food for export and the local population.

“It is time for all of us to take advantage of all these things we have in the country, even as government’s Import Substitution Programme is going to address these issues,” Aganga said.

He promised that the government would provide incentives and waivers, where they become necessary, to ensure that the target is achieved.

According to Aganga, the government has no reason to continue the importation of fertiliser, rice, palm oil and petrol. He said talks were on with companies that want to set up fertiliser plants in the country.

“This government is determined that in three to four years time, we would have replaced these products. We have identified all the products and will create the environment that is conducive for them to thrive and make sure that we become exporters in these areas,” he said.

Aganga said a new payroll system introduced by the government saved N12billion after the accounts of 16 MDAs were examined.

“We introduced IPS into our payroll system, where we have a bio-data of everybody in 16 MDAs and that has saved us $12 billion. We are now extending it to all the other MDAs. That tells you there is hope for significant savings in that area. That is part of the fiscal discipline approach, we are adopting,” he said.

The minister said the government has set up a committee looking at uncompleted projects to ensure that due process is followed and contracts completed.

“For the first time, we have a programme manager who will work with all the MDAs, from where they are doing procurement to where they are doing designs, implementation. They follow that process and report back to the Budget Office. Procurement, monitoring and evaluation are followed strictly by these bodies,” he said.

Aganga also said the government was designing a platform that will make it easier for each constituency to know the roads or any developmental projects that are being awarded, and when such projects will be completed. This he said, will make the people hold government accountable and create transparency in the execution of contracts.

He said that training of government personnel abroad will henceforth be scrutinised and tied to productivity.

He said that there is nothing wrong with the establishment of the Sovereign Wealth Fund (SWF) provided that the funds in the Excess Crude Account (ECA) are used prudently by benefiting governments and parastatals.

The Minister also disclosed that government has received 331 proposals, in terms of expression of interest in power projects. The Bureau of Public Enterprises (BPE) and their advisers, he said, are working to get the best investors for the power projects.

Aganga said the government has identified 65 projects needed to transform the economy. “Modern rail system is being proposed. We have also identified, which of them will be funded through Public Private Partnership and that’s why government has set out N15 billion tagged viability gap funding in the budget to help support companies that will be carrying out these projects, especially the unprofitable ones,” he said.

Government he said, needs to bring down domestic debt, which is usually tied to recurrent expenditure while foreign debts are used in developmental projects.

DMO Director-general Dr. Abraham Nwankwo said the government was partnering with the private sector to ensure that government’s plan to bring Nigeria into the top 20 economies in the year 2020 is achieved.

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