•Denies paying $23.3m consultancy fee …Says attendant pain temporary
From Uche Usim, Washington DC
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said that legislative approval was being awaited with other modalities on how to disburse $800 million to vulnerable 50 million Nigerians as a cushion as shock-responsive safety net ahead of the fuel subsidy removal in June, were being fine-tuned.
Speaking with journalists at the weekend on the sidelines of the 2023 Spring Meetings organised by the International Monetary Fund (IMF) and the World Bank, Ahmed said the programme has since secured the nod of the Federal Executive Council (FEC).
According to her, preparatory works were in top gear as all approvals were awaited, especially building the social register which will be used for the electronic transfers of the funds.
“We needed to have this ready because when the government eventually removes the fuel subsidy, there will be an immediate transport palliative that will be provided to the most vulnerable members of our society who have been identified, registered, and now contained in our national social register”, she explained.
While acknowledging that the removal of fuel subsidy would swell inflation, the Minister said that the attendant discomfort is short-lived as it would benefit the country in the long run.
On reports that $23.3million was paid to consultants to secure the $800 million, Ahmed said: “I have no clue as to what this is about. We raise our funds ourselves. We don’t need consultants to raise funds from these institutions. The $800 million, we raised by discussing this with the Debt Management Office, the Ministry of Finance, and the World Bank Country Office in Nigeria.
“We don’t need consultants to help us raise any kind of finance. We have internal expertise that has worked well over time, so we don’t need consultants for that”, she stated.
On what is being done to increase production in the oil and gas sector, the Minister said that security has been greatly enhanced since September last year as there has been minimal disruptions in pipelines.
“But what we also find is that the National Oil Company reports that there is a need for increased investments in the sector and the NNPC Limited has been unable to increase investments in the sector because it is using a lot of its resources to fund fuel subsidies. So, this fuel subsidy has effects in different facets.
“When the subsidy is removed, they will now be able to use their resources to invest alongside their operating partners. Their operating partners have been carrying them for some time and they are not doing that anymore to invest.
“So, they have to invest in being able to pay given the cash call obligations that are now in default or in some arrears up and those investments will help to increase the production levels in addition to the work that has been security”, she added.
On debt sustainability, the finance minister called for a speedy implementation of the G20 Common Framework on Debts. “While raising concerns on delays in debt restructuring for some countries, she encouraged cooperation between creditors and the affected countries to ensure completion of the programmes.
She noted that there were ongoing engagements with all critical stakeholders on the need to mobilize additional resources to remove the fuel subsidies and free up resources for investment in the social sector.
“I am happy with the retention of the IMF growth forecast for Nigeria at 3% which is consistent with our internal projections even though our desire is to have higher GDP growth.
With over 345 million people in Developing countries facing acute food insecurity and 700 million people living in extreme poverty most of whom are in Africa. How to address these issues formed the fulcrum of our meeting in Washington DC”, she explained.