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No alternative to deregulation – FG

By Babajide Komolafe
ABUJA — The Federal Government, yesterday, said that there was no alternative to the deregulation of the economy if Nigeria must achieve the Vision 20:2020 goal.

Meanwhile, the Presidential Task Force on Fuel Subsidy Claims has said that N232 billion has been confirmed as the amount of fraudulent subsidy claims by oil marketers.

Speaking at the 18th Nigerian Economic Summit in Abuja, Vice-President Namadi Sambo said the Federal Government believed in deregulation and expected that it was the way the economy should go.

He said economic realities showed that anything besides deregulation was a bad economic policy and when the time comes, Nigerians would realise that there was no alternative to developing the economy than to deregulate.

In an address delivered on behalf of President Goodluck Jonathan at the on-going Nigerian Economic Summit in Abuja, Sambo said: “The theme of the summit, “Deregulation, Cost of Governance and Nigeria’s Economic Prospects” captures the essence of our Transformation Agenda. The goal is to unlock those critical sectors of the economy that will accelerate job and wealth creation in our country. In addition, the theme captures our commitment to good governance and efforts to fully realise our huge economic potentials.

Reforming various sectors

“The task of nation building is a shared responsibility, requiring both the leadership and the governed to demonstrate integrity and accountability in the conduct and management of national affairs.  This is the guiding principle behind the determination of the administration to hold people accountable and ensure that business activities in both the public and private sectors are carried out responsibly in compliance with global best practices.

“To accomplish this objective, we started reforming various sectors of the economy, notably, oil and gas, agriculture, solid minerals, works, housing, and power immediately after coming into office. We are also placing emphasis on transparency and accountability in the oil and gas industry.

“The newly introduced process for the payment of subsidy on importation of refined petroleum products by marketers as well as the empowerment of the Economic and Financial Crimes Commission, EFCC, to prosecute those that undermine the system, no matter how highly placed, clearly underline our determination.”

Task Force ascertains N232bn fraudulent subsidy claims

Coordinating Minister for the Economy and Minister for Finance, Dr. Ngozi Okonjo-Iweala, speaking at the summit, disclosed that the Aig-Imoukhuede-led Presidential Task Force on verification of fuel subsidy claims had submitted its final report, with N232 billion ascertained as fraudulent subsidy claims by independent oil marketers.

She said: “The Presidential Task Force that verified over N1 trillion of subsidy claims, with very detailed work, off course there was the work done by the National Assembly but we went into it in details in order to determine which transaction has not been fraudulent.

“To do this, we needed forensic examiners, and  we took between 15 and 20 of them from PriceWaterHouse and Central Bank of Nigeria, and they have been working for more  than four months now. They did detailed, painstaking,  transaction-by-transaction verification of independent marketers claim of over N1 trillion.

“Last week, the work was submitted to Mr. President and of the amount verified, they have determined that N232 billion finally, you know they first came out initially with N370 billion, but now it has come down to N232 billion as claims that were substantiated to be fraudulent.

50 marketers involved

“Fifty marketers were involved, some of them have transactions that are clean but some are not clean. The report has been submitted. This has taken so much work, this has slowed down the pace at which we make payments. But it has also enabled us to put in place a series of steps. We have fired auditors who were not doing their jobs and we are putting in new ones with very strong letters of reference.

“We are taking care to make sure that before we pay, we check again and again to make sure the payments we are making for 2012 are not subjected to the problem of that of 2011. Yes, it has slowed down the pace of payment but it is because we are responding to what Nigerians want, though marketers who are not doing the right transactions are crying about it but we would not yield, government will not yield until we make sure we are doing the right thing.

N232bn for loans

“‘Now, of the N232 billion that have been put forward as ‘fraudulent’ claims, some of those marketers said that government owe them some money, we have now been able to vote N29 billion for that (to repay the loans). So instead of paying them, we are recovering what they owe us. And we look forward to recovering the balance of the total from them. Some of these people are being chased and prosecuted, and the EFCC and ICPC are still investigating them.”

We can’t attain Vision 20:2020 goal by 2020 — NESG

Meanwhile, the Nigerian Economic Summit Group, NESG, has said Nigeria cannot realise its goal of becoming one of the largest 20 economies in the world by the 2020.

Director General of NESG, Mr Frank Nweke Jnr,  said the achievement would go to Saudi Arabia.

Nweke made the observation while presenting the 2012 Nigerian Economic Scorecard at the event

The Vision 20:2020 is aimed at making Nigeria one of the top 20 economies by year 2020.

S/Arabia ‘ll be 20th largest economy

 He said:“Based on our projections, using the IMF World Economic Outlook database, our findings are that: Saudi Arabia will be the 20th largest economy in the world by 2020, with a Gross Domestic Product (GDP) of $1.2 trillion in Purchasing Power Parity (PPP).

“Nigeria, on the other hand would be the 27th largest economy in the world by 2020, with a GDP of US$864 billion in PPP; falling short of being the 20th largest economy by a GDP of US$316 billion.”

Nigeria needs $730bn

He said that Nigeria needed $730 billion to close the gap to become the 20th largest economy by 2020. According to him, this is calculated as the difference between the GDP of the 20th largest economy in 2020,which is Saudi Arabia and Nigeria’s current GDP in 2012 estimated by the IMF as $450 billion in PPP.

“Otherwise, Nigeria could become the 20th largest economy by 2035, cetetris paribus.”

He said only an accelerated pace of economic growth and reforms could shorten the time frame for the country.

Need for substantive reforms

Nweke noted: “For instance, there is a need for substantive reforms to ensure local oil refining capacity within the economy. Beyond the need to ensure oil refining capacity in Nigeria, we find a compelling need to diversify a way from the mono-productive oil base.”

In his comment, Dr Shamsuddeen Usman, Minister of National Planning Commission, said the vision was not a prediction but an inspirational roadmap through which Nigeria could become one of the 20 top economies by year 2020.

Nigeria is 31st economy

Usman said Nigeria was the 37th economy in the world when the Federal Government initiated the vision document in 1999 but “Nigeria is now ranked 31st economy in the world.”

He said the country’s present rank was based on the concerted efforts by the Federal Government to provide good governance, improve infrastructure and human capital development.

Mr Foluso Phillips,  chairman of NESG, urged the Federal Government to come up with national projects that would engage massive population, adding that projects such as the integrated rail system and infrastructure would provide massive employment to the people.


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