Dynamites were thrown. Grenades caused chaos. Gunshots rented the air. The scenes were Niger Delta. The victims were not human-beings but oil facilities – strategic ones for that matter. And the effects on oil production and export were not only huge and scary, but was costly. The economy bled and needed oxygen to be on the path of recovery.
Settling down to business, President Muhammadu Buhari and his team put up their thinking cap. The grievances of those blowing up the pipelines must be addressed. His deputy, Yemi Osinbajo, a professor of Law and now acting President, went from one creek to the other, preaching peace.
He visited oil-producing communities, listened to the people and spelt out the Federal Government’s commitment as captured in the ‘New Vision for the Niger Delta’. The vision has answers to the 16-point Demand Agenda submitted to President Buhari by the Pan Niger Delta Forum (PANDEF) in November, last year.
Thanks to the New Vision, the Nigerian Maritime University in Delta State is set to commence operation, additional N35 billion was approved for the Presidential Amnesty Programme, approval has been granted for the establishment of Modular Refineries across the nine Niger Delta states and work has resumed on abandoned projects in the oil-rich region, including the East-West Road.
The engagements with the Niger Delta and the Organisation of Oil Exporting Countries (OPEC) have helped to raise oil revenues to the extent that external reserves have grown by about $7 billion in the last six months. Some $87 million have also been added to the Excess Crude Account and $250 million to the Sovereign Wealth Fund (SWF).
The engagement with OPEC involved rallying the organisation and Non-OPEC members to discuss stabilisation of the global oil market in Doha and in Algiers. This led to an exemption from the OPEC production freeze and rise in oil prices to $55/pb, for the first time in 16 months.
Unlocking the potentials
The Buhari administration has leveraged on its goodwill to attract multi-billion investments and loans from China and Morocco. Buhari’s April 2016 visit to China unlocked billions of dollars in infrastructure funding and construction has started on the 150km/hour rail line between Lagos and Ibadan, the first major product of the collaboration.
One other potential-unlocking strategy the administration has come up with is the National Economic Recovery and Growth Plan (NERGP). Launched in April, it charts a course for the economy over the next four years.
The NERGP, according to the Federal Government, is to restore economic growth, invest in Nigerians, and to build a globally competitive economy. It plans to achieve these objectives by giving priority to agriculture, power, macro-economy, energy efficiency, transportation infrastructure and driving industrialisation through Small and Medium Scale Enterprises (SMEs).
As part of efforts to unlock the country’s potentials, power reform is being done. This has led to the launch of the N701 billion Payment Assurance Programme to guarantee payments to generating companies and gas suppliers.
The Power Sector Recovery Programme, which was launched in March, has been endorsed by the World Bank.
Another potential of the country, which was held down for years, is the capacity of the refineries. It has received serious attention in the last two years. Now, the total amount of crude being refined by the three refineries in Port Harcourt, Warri and Kaduna is now 10 million barrels. It was eight million barrels in 2015.
Agriculture and solid minerals have gotten their groves back. The sector grew by 4.11 per cent last year. Solid minerals recorded a seven per cent increase. The contribution of the Ministry of Solid Minerals to the Federation Account tripled to about N2 billion in 2016 up from N700 million in 2015.
Despite the low oil prices at the international market, the country’s external reserves have grown by $7 billion since October last year; the Excess Crude Account has seen an inflow of $87 million and $500 million has been added to the Sovereign Wealth Fund, which represents the first inflows since the original $1 billion with which the Fund started in 2012.
The Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria (CBN) and a soil map designed to aid fertilizer application has raised local production of grains. It has produced a model agricultural collaboration between Lagos and Kebbi states. The country’s rice imports fell from 580,000 MT in 2015 to 58,000MT last year.
A partnership between Nigeria and Morocco – Presidential Fertiliser Initiative – has resulted in the revitalisation of 11 blending plants. Through the initiative, which involves Morocco, supplying the country phosphate, the country has recorded annual savings of $200 million in foreign exchange and 60 billion annually in budgetary provisions for fertiliser subsidies. Farmers now purchase fertiliser at N5, 500, 30 per cent cheaper than before.
The administration is supporting MSMEs with $1.3 billion from the Development Bank of Nigeria (DBN). The cash was provided by the World Bank, German Development Bank, the African Development Bank (AfDB) and Agence Française de Development.
Ease of Doing Business Reform Programme
The Presidential Enabling Business Environment Council implemented its 60 National Action Plan between February and April. The plan has given willing investors the platform to search for company names on the website of the Corporate Affairs Commission (CAC). Such investors can upload their registration documents directly to the CAC website without hiring lawyers to prepare registration documents. A single form has been created for company incorporation to save time and reduce cost. The Federal Inland Revenue Service (FIRS) e-payment solution has been integrated with the CAC portal to facilitate e-stamping. The country now has a simplified Visa on Arrival (VoA) Process.
To also ease business, a joint physical examination of cargo has been directed to ensure one point of contact between importers and officials. The CBN, Customs and commercial banks have been compelled to process Net Export Proceeds forms within 72 hours and Pre-Shipment Inspection Agencies (PIAs) must issue Certificate of Clean Inspection (CCI) within three days.
The number of documents required for imports has been reduced from 14 to eight. The ones for exports have come down from 10 to seven. Now, terminal operators are mandated to finish container’s examination in 12 hours.
Acting President Osinbajo sealed the National Action Plan by signing three Executive Orders to improve efficiency in the business environment and promote local procurement by government agencies.
The Buhari administration is revitalising the country’s 3,500 kilometre network of narrow-gauge railway. A consortium led by General Electric and comprising Transnet of South Africa, APM Terminals of the Netherlands and Sinohydro Consortium of China, is working on the Lagos-Kano Railway narrow-gauge Line. The Abuja Light Rail system will also go into operation later this year. The first line to be launched will connect the city centre with the airport, with a link to the Abuja-Kaduna Railway Line. The test-run is scheduled for November. Full operation is planned for the first quarter of 2018.
The reconstruction of the Abuja Airport runway was done within the scheduled six-week period (March to April 2017).
Giving fillip to the economy
The economy has been the major challenge of this administration. To get the country out of the economic quagmire, the CBN is reforming the forex regime and this has increased stability in the market. The appetite for Nigerian stocks by foreign portfolio investors has also increased. Also, the Eurobond raked in more than $7.8 billion compared to a pre-issuance target of $1 billion. Analysts have described the trend as demonstration of the restoration foreign investor’s confidence in the economic reform agenda.
The CBN has created a new forex window for investors and exporters. CBN’s date has shown that the window has attracted $1.4 billion in its first four weeks of operation.
The apex bank has also reviewed the list of 41 items excluded from the CBN forex window, in line with a request from the Manufacturers Association of Nigeria (MAN). This is just as a Tariff-driven Tomato Policy has been introduced to promote local production.
More funds in the hands of local contractors mean more strength for the economy. N1.2 trillion was released for capital expenditure in last year’s budget — the largest capital ever spent in a single budget in the country’s history. As a result of this, work has started on several projects, hitherto stalled. These cut across road, rail and power.
Social Investment Programme
Regarded as the most ambitious social safety net programme, the Social Investment Programme (SIP) has over one million beneficiaries. The 160,000 N-Power beneficiaries, who have had their details validated, receive N30, 000 monthly stipends. The validation of 40,000 others is ongoing.
Significantly, 3,162,451 people in 26, 924 cooperative societies have been registered for the Government Enterprise and Empowerment (GEEP) Scheme. 57,234 interest-free loans have been issued in 28 states and Abuja, with women taking a chunk of 56 per cent.
The administration is catering for 1,051,000 in 8, 587 primary school pupils through its Homegrown School Feeding Programme (HGSFP) in seven states. Over 11,000 cooks have been hired under the scheme.
Through its Conditional Cash Transfer (CCT) scheme, 26,942 beneficiaries now get N5, 000 monthly stipend in nine states and 84 local government areas of Niger, Kwara, Ekiti, Kogi, Oyo, Osun, Borno, Cross River and Bauchi states.
Cleansing budgeting process/ BVN/ Efficiency Unit
The anti-corruption war of the current administration is one thing that is clear to all as one of the things that have changed in the last 24 months.
Aside the activities of the anti-graft agencies, the Presidential Initiative on Continuous Audit (PICA) is one anti-corruption effort not known to many. It is to strengthen controls over government finances through a continuous internal audit of Ministries, Departments and Agencies (MDAs). Thanks to this initiative more than 50,000 ghost workers have been identified. N198 billion was saved as a result of this in 2016.
The anti-corruption war has generated Budget Reforms, which made the President to direct all government agencies to prepare their budgets in line with International Public Sector Accounting Standards (IPSAS). A budget template was developed for this purpose.
For the first time, this year’s budget was collated, using a web-based application developed by the Budget Office of the Federation (BOF). MDAs were compelled to upload their proposals on a portal.
The Bank Verification Number (BVN) has also saved the government a lot of money. All payments are done only into accounts with verifiable BVN. This helped to detect the 50,000 ghost workers using the Integrated Personnel Payroll Information System (IPPIS) platform.
Through the creation of Efficiency Unit (EU), efficient use of government resources has been promoted. This has resulted in saving N15 billion that would have gone into travel, sitting allowances and souvenirs.
TSA/ Open Government Partnership and whistleblowing
On August 7, 2015, the President compelled MDAs to close their accounts with commercial banks and transfer their balances to the CBN on or before September 15 of that year. By this action, he gave life to a policy launched in 2012 but left unimplemented. This has resulted in the consolidation of over 20,000 bank accounts. An average of N4.7 billion is saved monthly in banking charges. Over N5.244 trillion is in the TSA.
The era of some MDAs having idle cash in banks and still borrowed exorbitantly from banks is gone for good.
The government keeps shutting corruption doors as they are discovered. One of such led to its signing on to the Open Government Partnership (OGP). Last year, President Buhari was at the International Anti-Corruption Summit organised by the Ubited Kingdom (UK) Government, where he pledged that Nigeria would join the international transparency, accountability and citizen engagement initiative. He fulfilled the promise last July when the country became the 70th country to join the OGP. This has led to an OGP National Steering Committee (NSC), which has developed a National Action Plan (2017–2019) to mainstream transparency in the management of public resources. The plan was submitted at the OGP Global Summit in Paris, France, in December last year.
The anti-corruption drive has led to the Whistleblowing Policy which within its first two months of operation, yielded $160 million and N8 billion in recoveries of stolen government funds.
A more transparent NNPC
The Nigerian National Petroleum Corporation (NNPC) was indicted by independent global reports for being opaque.
One of the first steps the administration took was to reconstruct NNPC’s opaque accounting structure. This led to the closure of more than 40 accounts. Now, NNPC publishes its financial reports monthly and the operational deficits have been reduced by not less than 50 per cent. NNPC outstanding Annual Audits from 2011 to 2014 has been conducted.
The agency is also undergoing other forms of restructuring that will make it an effective entity. The restructuring, analysts said, promote competition, predictable revenue generation and compliance with global best practices.
The administration has also resolved the shadowy oil swap deals that had cost the country billions of dollars and left it at the mercy of a few rich Nigerians. The government has also introduced third party financing to eliminate direct funding of cash calls. The administration has also renegotiated existing service contracts under Joint Venture and Production sharing contracts (PSC) Operations by about 30 per cent leading to operational efficiency improvements and cost reductions.
The administration has also eliminated the Offshore Processing Agreement (OPA) through the introduction of the Direct Sales and Direct Purchase (DSDP) scheme with reputable off-shore refineries. This has yielded annual savings of $1 billion.
The Petroleum Industry Governance Bill (PIGB) put together the Federal Ministry of Petroleum Resources, has now been passed into law by the Senate, after 17 years of failed efforts.
In 2016, the Federal Government exited the cash call arrangement with Joint Ventures (JVs) with International Oil Companies (IOCs), which put pressure on government’s finances. The failure to fully fund them resulted in more than six billion dollars arrears as at December 2015.
A new funding mechanism is being introduced to free the government from the budgetary obligation of coming up with the cash calls and increase oil production to about 2.5 million barrels per day.
The reforms have led to the negotiation of the debt arrears owed the IOCs to $5.1 billion and a long-term repayment plan has been agreed on.
No longer a pariah state
Unlike in the past, the international community warmed up to the Buhari administration in the last twelve months. The President has enlisted the support of multilateral institutions, such as the World Bank and IMF, security agencies, Western countries and other friendly nations to source, locate and repatriate stolen assets.
At one of his international engagements, specifically the London summit on anti-corruption, Buhari announced that Nigeria would begin the full implementation of the principles of the OPEN contracting data standards. This was in furtherance of his trips to the Middle-East, where he had gone to sensitise the governments on the need to repatriate stolen assets and hand over the looters for trial in Nigeria. In January last year, Nigeria and UAE signed Judicial Agreements on Extradition, Transfer of Sentenced Persons, Mutual Legal Assistance on Criminal Matters.
The Federal Government and the Swiss Government in March last year signed a Letter of Intent on the Restitution of Illegally-Acquired Assets forfeited in Switzerland. Under the agreement, Switzerland will repatriate $321 million illicitly acquired by the Gen. Sani Abacha family.
Boko Haram: No longer the Lord of Sambisa
One of the first things Buhari changed was the military structure, which led to the relocation of the Nigerian Military Command Centre to Maiduguri in May 2015. The results are glaring: Over 12,000 persons have been rescued by the troops, including 106 of the Chibok schoolgirls; since December 2015, all territories previously under Boko Haram control have been regained; by June 2015, Nigeria provided $21 million to the Task Force; and in June 2015, the United States (U.S.) announced a $5 million support for the fight against terrorism in the sub-region.
The seriousness with which the administration has pursued the anti-terror war has also led to the U.S. government further announcing an additional $40 million for humanitarian assistance in the sub-region.
Boko Haram’s operational and spiritual headquarters, “Camp Zero”, in Sambisa Forest, has been captured. The army has arrested Usman Mohammed, (a.k.a. Khalid Al Barnawi), leader of the Ansaru Terrorist group and one of the most wanted Terrorists in the world, on whose head the U.S. placed a $6 m bounty. Also arrested and being prosecuted is Amodu Omale Salifu, leader of an ISIS affiliate group active in Northcentral.
Presidential aides are confident that the next one year would bring better goodies for Nigerians in the area of security and others. They said the government has laid a proper foundation capable of putting the country on the right footing. Nigerians are waiting.