Ngozi Okonjo-Iweala Bounces Back
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- Category: Personality
- Published on Thursday, 28 June 2012 11:01
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Three reports yesterday indicate that Minister of Finance and Coordinating Minister for Economy, Dr. Ngozi Okonjo-Iweala's credibility might just recover from recent setbacks suffered from the fallout at the removal of fuel subsidy and the escalating debt profile of the country under her watch.
The first report is that the committee headed by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, which was set up by the Federal Ministry of Finance to verify arrears of claims on petrol subsidy for 2011 has uncovered overpayments amounting to N430 billion to private oil marketers and importers.
The second report is that the National Economic Council (NEC) has approved a management process for the $1billion Sovereign Wealth Fund (SWF) and also approved increase of the Excess Crude Account to $10billion from the present $5.3billion to protect the economy from persistent global crises. This is to provide at least a three-month buffer protection for the economy from the mounting uncertainty of the global economy.
Not long ago the Debt Management Office (DMO) commenced the release of N17 billion in Sovereign Debt Notes to oil marketers for the payment of 2012 fuel subsidy claims from the Petroleum Support Fund, but the Minister of Finance and Coordinating Minister for the Economy, suspended all further payments, saying that no payments will be made until the ongoing investigation and verification into all claims is concluded.
Ngozi Iwealla also said the payment of subsidy claims for the import allocations given to the marketers in December 2011, which covers the fuel imported up to the first quarter of 2012, was suspended after the claims by both the marketers and the Nigerian National Petroleum Commission overshot the budget.
Of the N888 billion earmarked for subsidy payments in the 2012 budget, a total of N232 billion was set aside for the payment of the 2011 arrears.
However, the Federal Ministry of Finance (FMF) had revealed that it had spent N451 billion of the N888 billion on the payment of arrears for 2011.
A further N17 billion was paid on 2012 subsidy claims, but the ministry last month suspended further payments on 2011 and 2012 claims, pending the submission of the committee led by Aig-Imoukhuede.
The suspension of payments on subsidy claims had created panic in the market, as several importers suspended importation, claiming that they could no longer raise Letters of Credit for the importation of new cargoes.
he committee, will be formally submitting its report to the government this week, but according to reports, they discovered that some marketers including companies that did not feature in the report of the ad hoc committee of the House of Representatives that probed the administration of fuel subsidies had fraudulently siphoned billions from the fuel subsidy armada.
The committee discovered discrepancies in the amount of subsidy claims made by some of the marketers and the volume of products they imported during the period under investigation.
Government sources explained that though the Federal Government had already spent more than 50 per cent of what was budgeted for subsidy payments in the 2012 budget on 2011 arrears, the finance ministry was not considering submitting a supplementary budget to meet its obligations for the rest of the year.
“The minister (Okonjo-Iwealla) is trying to work out the methodology to plug the leaks in the system and would rather do this than submit a supplementary budget to President Goodluck Jonathan for onward delivery to the National Assembly, as this could lead to fiscal expansion and more borrowing.
“It is not in her agenda to submit a supplementary budget, as whatever method she uses to get marketers to cough up what they owe the government will lead to savings for the federation,” the source explained.
With the committee concluding its findings, subsidy payments will resume next month.
The committee headed by Aig-Imoukhuede was set up in May to undertake a forensic audit and verify claims by oil marketers and NNPC, and the payments made to them.
President Jonathan and Okonjo-Iweala, sources added, are determined to plug leakages in the fuel subsidy regime and to improve the management of the Petroleum Support Fund (PSF).
