• Friday, June 14, 2024
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FG proposes self-funded JVCs to curb debt, political interference

oil

The Federal  Government yesterday proposed a new self-funded Joint Ventures Cash Calls system, known as the IJVC, in an affort to avoid future indebtedness in cash calls, improve the country’s economic health and curb political interference,

The proposed JVC is a self-funding entity outside of otherwise cumbersome government budget process and is expected to improve accountability within the governing structure of the Joint Ventures and reduce political interference, given that operational control rests with joint teams and ultimately IJVC entities when formed. It would also focus on commercial decision making.

Cash calls of the Nigerian National Petroleum Corporation (NNPC) have risen to over $6billion, a staggering amount, even as the country  goes into recession. The Senate has also launched a probe into the

venture cash calls by the NNPC, declaring that the volume of indebtedness was unacceptable. The probe was however stalled by the absence of International Oil Companies (IOCs).

Briefing newsmen on the outcome of the National Economic Council meeting which held at the Presidential Villa, Abuja, Taraba state governor, Darius Ishiaku, said the minister of state for petroleum, Ibe Kachikwu briefed the Council on the proposal. Kachikwu told the council that the current upstream JVC arrangement in Nigeria’s Oil and Gas Industry are incorporated JVs with NNPC and the IOC partners. Kachikwu further proceeded to propose a new self-funded JVC Cash Calls, the IJVC.

“Decision on the proposal would be taken once negotiations for the new IJVC are concluded,” Ishiaku said.

Minister of Finance, Kemi Adeosun, reported to the Council that the balance in the Excess Crude Account as at July 20, 2016 stood at USD3.93 billion as against $2.261billion in June. Adeosun also gave the Council an update on the Budget Support Facility, stating that of the

35 states that applied for the facility, 28 states qualified and have begun receiving their share, while seven states sent their required documentations late and are still being processed.

Council was also informed by the Central Bank Governor, Godwin Emefiele that all bank customers that operate Domiciliary Accounts are now permitted to lodge dollar cash into their non-export Dom accounts, subject to the provisions of the money laundering Act.

The Minister of Budget and National Planning Udoma  Udo Udoma, made a presentation to Council on Medium Term Framework (MTEF) for 2017 – 2019.

As part of the assumptions driving macroeconomic parameters and targets for the MTEF, states may need to consider strengthening IGRs and blocking financial leakages. The may also nee to sustain the implementation of the fiscal sustainability plans, such as better expenditure management, focus spending on priorities that will increase productivity and job creation in their jurisdictions, as well as fulfil conditions in the Fiscal Sustainability plan, to enable them access the budget support funds.

He said council urged the States to adopt the MTEF and Fiscal Strategy Paper as basis for developing their annual budgets, as well as be guided by assumptions of the MTEF and be conservative in their revenue and expenditure projections for 2017 – 2019 in view of declining oil price.

Niger State Governor, Abubakar Bello, who also briefed newsmen said the minister of agriculture made a presentation to the council on the country’s self-sufficiency in food production.

The presentation noted that economic diversification must be taken with all commitment, in view of  the current harsh economic situation. He highlighted the need for a focus on agriculture by all governments and citizens with renewed vigor.

 

Elizabeth Archibong