FEDERAL MINISTRY OF FINANCE
News Release. January 15, 2014
HOUSE FINANCE COMMITTEE’S 50 QUESTIONS:
PROVIDES DETAILED 102-PAGE RESPONSE
The Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala has provided a detailed 102-page documented response to the 50 questions posed by the House of Representatives Committee on Finance.
The document provides, in extensive detail, including tables and graphs, answers to the committee’s well publicized questions.
In her response, the Minister stressed that, in spite of many challenges which government has acknowledged, the Nigerian economy is showing real and measurable progress in many areas. This can be seen in the fact that more jobs are being created; roads, rail and other infrastructure are being improved; the country is saving for the future and planning better for the present. The Jonathan administration, contrary to the impression given by some critics, is making impact in the areas that, according to credible opinion polls, Nigerians are most passionate about.
For instance, on job creation which is a central focus of the administration, a total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS) of which 250,000 were seasonal jobs created in dry season farming in 10 northern states. In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The SURE-P Community Services prgramme has also created 120,000 job opportunities.
The improvement in federal highways has been confirmed by many Nigerians who travelled over the Christmas and New Year holidays. Key highways which have witnessed significant progress include Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road. Preliminary work has commenced on Lagos-Ibadan road and the Second Niger Bridge.
The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional while work on the Eastern line linking Port Harcourt to Maiduguri is about 36% complete. The Abuja-Kaduna Standard Gauge line has attained 68% completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77% completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013.
One of the issues the Coordinating Minister dealt with is the charge, made by the Chair of the Committee in the media that the country is racking up debts under Dr Okonjo-Iweala’s watch as Finance Minister. As shown in her response, there is no substance to the charge. In fact, the opposite is true. Right from her Senate confirmation hearing in 2011, the Minister had identified rising debt as a major challenge which the country needs to confront. Under the leadership of President Jonathan and working with the Debt Management Office and the Budget Office of the Fedration, the Minister followed through with a robust approach which includes progressive reduction of borrowing, quick settlement of due debts and the retirement of N75 billion of maturing bonds via a Sinking Fund dedicated to paying off substantial bonds. These measures have produced clear results as shown in the reduction of borrowing from N852 billion in 2011 to N571.9 billion this year.
It is important to note that many of the 50 Questions had been adequately answered at various fora, including meetings and open hearings organized by the House Committee. The Minister’s detailed response in spite of this, is a reflection of her well known high regard for the National Assembly as an institution.
Please see below some highlights of the Coordinating Minister’s answers to the 50 questions.
Paul C Nwabuikwu
Special Adviser to the Coordinating Minister for the Economy and Minister of Finance
HIGHLIGHTS OF SOME ANSWERS TO THE
A total of 1.6 million jobs were created last year, according to the National Bureau of Statistics (NBS). In agriculture for instance, the provision of inputs in 10 Northern states enabled dry season farming and created over 250,000 seasonal jobs. season. In manufacturing, the Onne Oil and Gas Free zone created an estimated 30,000 direct and indirect jobs. The government special intervention programme YouWin supported young entrepreneurs, creating over 18,000 jobs. The Sure-community Services has also created 120,000 job opportunities.
Progress has been made on construction of the Kano-Maiduguri road, the Abuja-Lokoja road, the Apapa-Oshodi road, the Onitsha-Enugu-Port-Harcourt road and the Benin-Ore-Shagamu road, among others. Preliminary work has also commenced on the Lagos-Ibadan road, as well as on the Second Niger Bridge. The Railway Modernization Programme involving the construction of standard gauge lines is underway. The 1,124 km Western line linking Lagos and Kano is now functional while work on the Eastern line linking Port Harcourt to Maiduguri is about 36% complete. The Abuja-Kaduna Standard Gauge line has attained 68% completion, and the Itakpe-Ajaokuta-Warri Line which is presently 77% completed, will be completed next year. The annual passenger traffic on our railways has increased steadily: rising from 1 million in 2011 to 5 million in 2013.
We have dredged about 72 km of the lower River Niger from Baro in Niger State to Warri in Delta State; and completed the construction of the Onitsha inland port; while the Baro port is nearing completion. The result of all these is that we now have year round navigation around the lower Niger; and we are already witnessing an increase in cargo volume from below 2.9 million metric tons in 2011 to over 5 million metric tons on the inland waterways. As in the case of the rail transport, the number of passengers travelling via our inland waterways has increased fourfold from 250,000 in 2011 to over 1.3 million.
Key milestones recorded in 2013 include the construction of 9 dams, which resulted in an increase in the volume of the nation’s water reservoir by 422MCM. Progress was made on major projects such as the South Chad Irrigation Project, the Bakolori Irrigation Project, and the Galma Dam. Implementation of irrigation and drainage programme resulted in increase of the total irrigable area by over 31,000Ha, job creation for about 75,000 farming families and increased production of over 400,000Mt of assorted irrigated food products.
The 22 airports across Nigeria are being remodeled and upgraded: in 2013, we completed the upgrade of 11 airport terminals and work on the remaining 11 terminals is in progress. The Enugu Airport is now operational as an international airport with a new terminal under construction. We have also commenced work on the construction of three new international airport terminals: in Lagos, in Kano, and in Abuja. Modern navigational and meteorological systems were installed at our airports to improve air safety. In addition, 6 airports namely: Jos, Markurdi, Yola, Jalingo, Lagos and Ilorin which are strategically located in proximity to food baskets have been designated as perishable cargo airports and international standards perishable cargo facilities are being developed at these airports. A new Cargo Development Division has been established in FAAN to give focus to this effort.
We have completed one of the most comprehensive and ambitious power sector privatization and liberation programmes globally. We have privatized 4 power generation companies and 10 power distribution companies, and have virtually settled all claims and entitlements of PHCN workers. Some major cities get an average of 16-18 hours of electricity per day in 2013. This however dropped in November and December during the transition we expect some teething problems and then power supply should pick up. In 2013, we also mobilized $1.5 billion in financing from multilateral sources for investment and upgrade of the transmission network in 2014 and beyond. To promote clean energy, we also commenced construction of the 700MW Zungeru Hydro-Power project in 2013. We have strengthened relevant power market intermediaries such as the Nigerian Bulk Electricity Trading Plc (NBET), and backed them with financing to stimulate greater private investments in the sector.
We launched the National Industrial Revolution Plan (NIRP), which focuses on industrializing Nigeria and diversifying our economy into sectors such as agro-processing, light manufacturing, and petrochemicals. In the 2013 fiscal year, Nigeria was named the #1 destination for investments in Africa by UNCTAD (the UN Conference on Trade and Development), attracting over $7 billion in FDI. There were a large number of both foreign and domestic investments in the economy, such as by: $250m investments by Procter and Gamble in Ogun State; $40 million in agricultural projects by Dominion Farms. To further support the manufacturing sector, the Government successfully negotiated a strong Common External Tariff (CET) agreement with our ECOWAS partners, which would enable us to protect our strategic industries where necessary. The Nigerian Enterprise Development Programme (NEDEP) was initiated in 2013 to address the needs of small businesses. Some key interventions by NEDEP include supporting small companies with access to affordable finance, access to markets, capacity support, business development services, youth training, and support in formalizing their operations. In addition, in 2013, we reduced business registration costs for small businesses by 50%, to help them conserve capital. Finally, as a result of our backward integration policies, Nigeria is now a net exporter of cement and expanded cement output capacity from 2 million metric tonnes in 2002 to 28.5 million metric tonnes in 2013.
There have been many achievements in the agricultural sector following the launch of the Government’s comprehensive Agricultural Transformation Agenda program. In October 2013, inflation fell to 7.8%, its lowest since 2008, partly due to higher domestic food production. The Government’s Growth Enhancement Scheme (GES) is providing subsidizing inputs to farmers via an e-Wallet program. In fiscal year 2013, an estimated 4.2 million farmers received subsidized inputs via the Government’s Growth Enhancement Scheme. As a result, in 2013, we produced 1.1 million metric tonnes of dry season rice across 10 Northern states; and over 250,000 farmers and youths in these States are now profitably engaged in farming even during the dry season. The Federal Government launched Staple Crop Processing Zones to support investments in the entire agricultural value chain. At present, there are over $8 billion of private investment commitments from agribusiness ventures such as: Flour Mills of Nigeria, the Dangote Group, Syngenta, Indorama, AGCO, and Belstar Capital. In 2012, 2.2 million metric tonnes of cassava chips were exported, exceeding the ATA’s target by over 100% while the 40 percent substitution of cassava for wheat has been achieved through research and collaboration with the IITA and Federal Institute for Industrial Research. Similarly, there has been a decline in wheat imports to Nigeria from an all-time high of 4,051,000 MT in 2010 to 3,700,000 MT in 2012.
To further invest in the human capital of our population, we are building strong safety nets and improving access to primary health care using the Saving One Million Lives programme. In the 2013 fiscal year, we recruited 11,300 frontline health workers who were deployed to under-served communities across the country. We have reached over 10,000 women and children with conditional cash transfer programmes across 8 States (Anambra, Bauchi, Bayelsa, Ebonyi, Kaduna, Niger, Ogun, Zamfara) and the FCT and we intend to scale up this successful initiative. As a result, over 400,000 lives have been saved through our various interventions. Nigeria’s national immunization coverage has now exceeded 80% and is yielding demonstrable results. The Type-3 Wild Polio virus has been contained in 2013, with no recorded transmissions for more than one year; while Guinea worm that previously affected the lives of over 800,000 Nigerians yearly has been largely eradicated. Facilities at various medical centers across the country – such as the University of Nigeria Teaching Hospital in Enugu, and the University College Hospital in Ibadan – have also been upgraded. Finally, Nigeria has also been honoured as Co-Chair of the fourth replenishment of the Global Fund to fight AIDS, TB and Malaria, and I shall be co-chairing this initiative with other selected world leaders.
To improve access to education at all levels, a number of priority investments were made in 2013. These include the construction of 125 Almajiri schools and establishment of 3 additional Federal Universities, to bring the total number of new Federal Universities to 12. Additionally, special girls’ schools were constructed in 13 States of the Federation. In fiscal year 2013, we rehabilitated 352 science and technical laboratories while 72 new libraries have been constructed in the Federal Unity Schools. Furthermore, the laboratories of all 51 Federal and State Polytechnics have been rehabilitated and micro-teaching laboratories are being constructed in 58 Federal and State Colleges of Education. The Presidential Special Scholarship programme for first class graduates has commenced with an initial set of 101 beneficiaries. Over 7,000 lecturers from Universities, Polytechnics and Colleges of Education are benefitting from scholarships to support their doctoral training in Nigerian and overseas institutions.
We continued our strategic focus on investing in modern ICT technologies. We constructed 500km of fibre-optic cable to rural areas; 3,000km targeted for deployment in 2013/2014. A total of 266 Public Access Venues were established in 2013 – 156 Rural IT Centres, 110 Community Communication Centres. We facilitated the deployment of mobile communications base stations in rural areas of Nigeria. A total of 59 Base Stations have been installed thus far, with an additional 1,000 planned for 2014. In addition, we also provided wholesale internet bandwidth to Internet Service Providers, Cyber cafes, and ICT centres like Community Communication Centres (CCC) in rural communities – connectivity to 12 out of 18 pilot sites completed. In 2013, we deployed a fibre-optic high-speed internet network to connect 27 Federal universities, and provided computing facilities to 74 tertiary institutions and 218 public schools across the country. Finally, we established innovation centers to support entrepreneurs in the ICT sector, and also launched a Venture Capital fund of $15 million for ICT businesses.