THE NATION WEDNESDAY, MAY 20, 2015
2
NEWS
How to reshape
•From left:Managing Director, FrieslandCampina WAMCO Nig Plc., Mr Raul Colaco; Chairman, Mr. Jacob Moyo Ajekigbe; Company Secretary, Mrs. Bolanle Obat-Olowu and outgoing Chief Executive Officer, Royal FrieslandCampina, Mr Cees't Hart at the company’s 42nd Annual General Meeting in Lagos PHOTO DAYO ADEWUNMI
It is nightmarish to imagine that civil servants in Nigeria, the world's sixth largest oil producer go without pay at the end of the month. Bizarre as it may seem, stakeholders have urged the various levels of government, to look inwards and explore other sources of revenue to turn the situation around, reports Group Business Editor, SIMEON EBULU
W •From left: Representative of the Permanent Secretary, Ministry of Finance, Mr. Gabriel Aduda; Director, Customer Business Development, Procter & Gamble (P&G), Mr .Ayman Fahmy; Director, Global Government Relations, P&G, Temitope Iluyemi and Business Manager, Diamond Bank Plc., Mrs Uloma Jide-Afonja at the P&G G-Win/YouWin Small and Medium Enterprises Development Training in Abuja...yesterday.
•Managing Director, Renaissance Capital, Mr. Charles Robertson; Executive Partner, Africa Capital Alliance, Mr. Cyril Odu; Founder, Center for Values in Leadership, Prof Pat Utomi and Managing Director, Smile Communications Nigeria Limited, Mr. Michiel Buitelaar at the sixth annual Pan-Africa Investor Conference in Lagos.
•From left: Director, Middle East & Africa, IE Business School, Spain, Sabine Yazbeck; Executive Director, Personal & Business Banking, Stanbic IBTC Bank, Mr. Obinnia Abajue; Vice Chairman, IE Business School, Diego del Alcazar Benjumea and Head, International Personal Banking, Stanbic IBTC, Daniela Okumagba at the partnership signing between Stanbic IBTC and IE Business School in Lagos...yesterday. PHOTO: BOLA OMILABU
HAT began like an isolated development in a few states, dubbed nonoil producing states, has now spread like a cancerous tumor across the six geo-political zones. It has become a headache to all levels of government. Ordinarily, civil servants on the payroll of either the federal, or state government, enjoy not only secured tenure but regular payment of emoluments. Not so any more. The story making the round that nearly all the thirty six states, save Lagos and may be, two others, are in arrears of several months of workers emoluments, has turned a national embarrassment and a bad dream of a sort. Concerned Nigerians are raising questions as to what may have gone wrong, wondering whether things have gone so bad that an oil producing country, the sixth in the hierarchy globally, can no longer pay salaries as at when due. If it was a rumour, or a conjecture, the truth has now been told, that several states have not paying their employees regularly. In some states, the workers have not received their salaries for upward of six months and above. More bizarre in the development, stakeholders argue, is the fact that over 70 per cent of the national budget, in the case of the Federal Government and nearly 60 per cent in most states, is devoted to recurrent expenditure, which major subhead, is salaries and emolument. So far, the Federal Government and the states have not offered a convincing explanation for the development, except the rhetoric of the obvious dwindling resources triggered by the 50 per cent drop in prices of crude oil at the international market. Granted that the situation, is as presented by the authorities, the stakeholders are saying that the huge resources spent in the run-up to the last general elections, has made a lie of this argument. To address the challenge, key figures in the Economic Management Team, amongst them the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele are advocating that government should trim its ownership of the nation’s hydrocarbon, as a short-term measure, and beef-up its revenue base. The
•The Ministry of Finance building
other option according to the minister is increased borrowing. Nigeria can sell off part of its share holdings with Joint Venture Partners (JV Partners) and the International Oil Companies (IOCs), in addition to further borrowing options, to raise the funds needed to meet short-term financial obligations, she said, adding that her proposition are informed by the 50 per cent drop in Nigeria’s revenue from sliding oil prices and the capital flight that was induced by exiting foreign investors, who feared a possible backlash from post-election violence in the run-up to the last general elections and the huge financial commitment in prosecuting the Boko Haram insurgency in three Northern states of Adamawa, Borno and Yobe. In the same vein, Emefiele, has advocated that selling the country’s majority stakes in joint ventures with multinational oil companies could help raise the much-needed funds for infrastructure development and also address the expenditure sub-heads. He made bold to say that as much as $75 billion could be realised from such sales. “If you sell down a 30 per cent stake, you could raise something substantial. It is an option they need to consider as a way of raising further funding,” the CBN chief told The Financial Times. “It is an option now because our revenues have dropped and we don’t need to pile on more debt. The alternative is to look for ways of realising value from some of the government’s assets,” he said, adding that a substantial portion of the funds raised should be invested in transport and energy developments that would “grow the economy and create jobs.”